Booming cell phone sector rare Africa success story, by Rebecca Harrison

Tuesday, June 28, 2005

Ask the head of leading African mobile phone operator Vodacom why last year’s profits were so huge, and he points to the long lines of South Africans snaking from the company’s flagship store in Johannesburg.

“Just look at all these people signing up for phones,” marvels Alan Knott-Craig. “They can’t seem to get enough of them and these are ordinary folk, not white executives.”

Vodacom and its main rivals MTN and Celtel — now part of Kuwait’s MTC — are making a killing in Africa as millions often too poor for decent homes, healthcare and education, pour their last few pennies into airtime.

Cell phone companies have proven that even in a continent hobbled by patchy infrastructure, unskilled workforces and an impoverished population, there is still money to be made.

And as the world’s most powerful leaders prepare to tackle African poverty at next month’s Group of Eight (G8) summit, experts point to the continent’s biggest boom since gold was discovered as a rare glimmer of hope.

“Telecoms are Africa’s big success story — perhaps the only one,” Knott-Craig told Reuters.

But what is the secret of the industry’s success and how can it be replicated by others hoping to make money or foster business in the world’s poorest continent?

Simple, say experts: demand, and investor-friendly government policies.
Story found here.

Source: Reuters UK